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December 7, 2004

Working with vendors to close more loansPamela St. Pierrevendors, success, tips
The smooth sailing loan is a thing of beauty; when all is said
and done, brokers look good, lenders look good, and borrowers get
their money and tell all their friends. But we are all experienced
enough to know that the seas are not always calm. When problems
happen, brokers lose commission, lenders get cranky, vendors get
the blame and borrowers, well, still tell their friends.
As the head of a unit dedicated to making Mortgage Brokers look
good, I have sailed the seas in all kinds of weather. After closing
between 125 and 175 brokered loans a month, my unit has navigated
these seas through all sorts of conditions.
Here are a few ways to ride the waves without capsizing:
1. Cooperation is key. We look to the broker to
assist us in making each loan work. They have to make sure that
certain considerations, such as insurance and necessary payoffs,
are taken care of. We work within a two- to three-day closing
window, but if we have a broker who does not go out of their way to
assist us, the buyer cannot close, and will ultimately tell their
friends not to use that particular broker.
2. Know your lender. Each lender has their own
unique criteria that must be met before the loan closes. Brokers
who want their loans to close in a timely manner have to explain
the product to their borrowers-interest rates, ways to obtain a
better rate and what the loan amount will be are all of utmost
importance. Here is a scenario that backfires every time: An
overeager Mortgage Broker triumphantly tells the borrower, "No
problem. We have your loan." What the broker neglects to share,
however, is the full picture. At closing, the borrower will look at
the interest rate and say, "There is no way I am going to pay
this," signaling the end of closing and the beginning of a long day
for all those involved.
3. Communicate to your borrower. Let us take
ourselves back to the closing table. Nothing is more frustrating to
the borrower than suddenly finding out that they have to adjourn
because they did not bring the right paperwork to the closing
table. Make sure borrowers are aware of everything they need to do
before closing. Do not gloss over the details. Most borrowers today
are educated. They do not like surprises and will not accept
misinformation just because they are nearing the end of the
process. The borrower will have no problem pulling out if the loan
does not feel right.
4. Watch the details, even if it is near the end of the
month. Brokers should never try to push loans through so
that they can make their quotas. Details get lost in the
"hurry-up-and-push" mode, and those loans never close.
5. Communicate with your vendor. As vendors, we
strive to develop a good rapport with the brokers we deal with, but
we cannot do that if they do not communicate with us. Suppose there
is a question about a borrower's credit that the lender needs us to
take care of. We need the Mortgage Broker to return our phone calls
on this issue without procrastinating. We can understand that no
one wants to hear about a touchy subject like credit history, but
the sooner we know about an issue, the quicker we can get it
resolved. Issues do not just go away. If they are not settled
quickly, the buyer ends up being inconvenienced.
It is also helpful if brokers tell us how they would like us to
communicate with their clients. Do they mind if we call the
borrower directly, or would they prefer that all information
requests go through them? We can adapt to any situation, so long as
brokers let us know what they prefer.
6. Know your product. What good brokers bring
to their jobs is the ability to understand their mortgage products,
and how these products meet the borrower's needs. Brokers need to
honestly communicate this information to their borrowers, and
inform them about rescission, how the loan funds and the conditions
that the loan requires. There should be no surprises for borrowers
as the loan moves forward. Good brokers know the difference between
the products that lenders offer. A single lender may have a number
of products, from full-closing cost products to no-closing cost
products, and the best brokers understand their differences and
explain them to their borrowers, when appropriate. These products
change, and brokers need to keep up on their correspondence with
lenders, so they can fit borrowers into the best possible deal.
There is no question that charting a course through today's loan
waters is more complicated than ever before. So, why not let your
vendor work with you to make that trip as easy as possible? That is
the kind of smooth sailing we are all looking for.
Pamela St. Pierrre is an assistant vice president of the
broker closing team at Integrated Loan Services. She can be
contacted at (800) 842-8423 or by visiting the ILS Web site,